Canadian National Railway Company
(
CNI
) recently announced that it will build five extended sidings on
its B.C. (British Columbia) North Line this year to serve the ever
growing traffic in its B.C. North corridor.
The proposed construction of five extended sidings, which is a
part of the company's multi-year capital program, will increase the
capacities of these trains, thus supporting more volumes across
Edmonton, Alberta (Alta)-Prince Rupert, and the B.C. corridor.
Since 2004, Canadian National has extended or constructed 21
sidings to transport 12,000-foot trains between Edmonton and Prince
Rupert. The new sidings are in addition to the new signaling and
train control, several tunnel and bridge clearances, yard
expansions at Smithers and Terrace, B.C., and the construction of a
longer siding at Swan Landing, Alta.
Canadian National aims to maintain high railroading (velocity,
reliability, lowers costs and asset utilization) standards. In
addition, Canadian National is continuously seeking productivity
initiatives to reduce costs and leverage its assets.
For this purpose, the company targets to spend C$1.8 billion
this year, of which over $1 billion will be directed toward track
and infrastructure improvement as well as productivity initiatives.
Approximately C$150 million is allotted toward acquisition of new
freight cars and upgrading locomotives along the Edmonton-Prince
Rupert corridor and around C$500 million has been dedicated toward
information technology and various new projects.
The first quarter 2012 earnings surpassed the Zacks Consensus
Estimate and improved from the year-ago level on strong pricing.
Despite the slowing economy and stiff competition from
Canadian Pacific Railway
(
CP
), we expect the company to benefit from strong growth across all
its segments on favorable demand/supply dynamics. We, thus,
maintain our long-term Neutral recommendation for Canadian National
Railway Company.
Currently, it has a Zacks #3 Rank, implying a short-term Hold
rating on the stock.
Based in Montreal, Canada, Canadian National Railway Company is
engaged in the rail and related transportation business. Canadian
National Railway operates the largest rail network in Canada and
the only transcontinental network in North America.
CDN NATL RY CO (CNI): Free Stock Analysis
Report
CDN PAC RLWY (CP): Free Stock Analysis Report
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